Uniply Industries Ltd Directors Report.

To All members,

Your Directors are pleased to present the 21st Annual Report and the Company’s audited accounts for the financial year ended 31st March, 2017.

FINANCIAL RESULTS

The highlights of the financial results of the company for the year ended 31st March, 2017, is summarised below.

RS. IN LAKHS
PARTICULARS FOR THE YEAR FOR THE YEAR
ENDED 31.03.2017 ENDED 31.03.2016
Gross Turnover 16637.26 15096.17
Less: Excise Duty & Sales Tax 468.24 1527.45
Net Turn Over 16169.02 13568.72
Add: Other income 47.86 16.57
Total Revenue 16216.88 13585.29
Operating Profit 14315.35 1640.94
Less-Finance Cost 651.76 804.00
Profit/(Loss) before Depreciation & Tax 1249.77 836.94
Less: Depreciation & Amortization expenses 123.12 165.95
Profit/(Loss) before Extra-Ordinary items & Taxation 1126.64 670.99
Less: Extraordinary items - 106.93
Less: Provision for Taxation
Current Tax 148.50 3.00
Deferred Tax 248.92 181.86
Profit/(Loss) after Tax 729.22 379.20
Balance brought forward (538.51) (917.71)
Provision for Dividend and Dividend tax - -
Transfer from General Reserve - -
Balance carried forward to next year 190.71 (538.51)

PERFORMANCE REVIEW

The Net Sales during the year under review is increased by 19.16% from Rs. 13568.72 lakhs to Rs. 16169.02 lakhs. The Profit before Tax (PBT) is increased by 99.74 % from Rs. 564.06 lakhs to Rs. 1126.64 lakhs. The Profit after Tax (PAT) is increased by 92.30 % from Rs. 379.20 lakhs to Rs. 729.22 lakhs.

DIVIDEND

Keeping in view of the marginal profit after adjustment of accumulated losses, your Directors regret their inability to declare any dividend.

TRANSFER TO RESEVE

Since there has been an accumulated loss, nothing has been transferred to General Reserve.

DIRECTORS RESPONSIBILITY STATEMENT

In compliance with section 134(3) (c) of the Companies Act, 2013, your

Directors confirm:

a. That in the preparation of Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same.

b. That they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and the profit or loss of the company for that period.

c. That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of your company and for preventing and detecting fraud and other irregularities;

d. That they have prepared the annual accounts on a going concern basis.

e. That proper internal financial control were in place, that the financial controls were adequate and were operating effectively, that systems to ensure compliance with the provisions of all applicable laws.

SHARE CAPITAL

The authorized share capital and paid up Share Capital as on 31.03.2017 was Rs.25, 00, 00,000/- and Rs. 23,90,71,990/- respectively.

PREFERENTIAL ISSUE

During the year under review, the Company has allotted 29,91,187 Equity Shares of Rs. 10/- each at Rs. 204.62/-as fully paid up to promoter and non- promoters on preferential basis in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. The above said Equity Shares rank pari:passu with the existing equity shares of the Company and are subject to lock-in-period.

The company had obtained approval of shareholders at Annual general Meeting held on 29.09.2016 to issue and allot subject shares to the promoter and non-promoters under preferential basis in accordance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009.

DIVERSIFICATION ACTIVITY AND STRATEGIC DEVELOPMENT

Your company has entered into an agreement to sell its plywood division along with associated working capital to its associates UV Boards Limited for a total economic consideration of Rs 300 Crores.

• UV Boards will fund the acquisition through the issuance of shares worth Rs 111 Crores to Uniply and balance in cash consideration.

• UV Boards will pay Rs 42 Crore for the purchase of Uniply’s Gujarat facility.

• The trademarks of Uniply will be licensed to UV Boards for a total fee of Rs 75 crores, to be paid equally over 10 years, in advance at the start of the year.

This transaction will result in fully deleveraging the balance sheet of Uniply by repaying all long-term debt outstanding of the company and its subsidiary Vector Projects to the tune of Rs 145 Crores.

As a result of this transaction, Uniply’s stake in UV Boards will increase to 37.11%, and the Company will have the right to nominate 4 members to the Board of Directors of UV Boards.

The current management team of Uniply’s plywood business headed by Mr. Srinivasan Sethuraman and Mr. Ramesh Malpani will be integrated into that of UV Boards and financial results of UV Boards consolidated into that of Uniply on closing of this transaction.

As an integrated provider of architecture, design and build, and interior fit out services, your company with Vector have been awarded significant wins in design and build turnkey projects to the extent of Rs 1,050 crores.

This is a sizeable expansion in the Company’s business footprint and execution of these projects over the next 12-14 months will require deployment of advanced project management skills, state of the art processes and technologies through the combined senior management teams of Uniply and Vector. The Company’s efforts will continue to be focused on and limited to Residential and Commercial building solutions.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility, encompassing much more than social outreach, continuous to be an integral part of the company’s activity. The detailed CSR report is annexed as per annexure A

STATUTORY AUDITORS

M/s. C. Ramasamy & B Srinivasan’s tenure is expiring on conclusion of the ensuing AGM of the company. Hence a new Statutory Auditor be appointed on rotation. The company has received profile of M/s. Lily & Geetha Associates, Chartered Accountants, 16 (Old No. 37) Akbarabad 2nd Street, Kodambakkam, Chennai - 600024 who may be appointed as Statutory Auditors of the Company. The Audit Committee after reviewing the profile and expertise of firm as whole recommended their appointment to the Board of Directors for their consideration and approval.

EXPLANATION ON QUALIFICATION MADE BY STATUTORY AUDITOR

As regards to the Auditor’s observation in para iv & vii of the Annexure to the Auditors Report. Yours Directors wish to inform you that the same have been regularised subsequently in the current year.

COST AUDIT/MAINTENANCE OF COST RECORDS

The company was not falling under criteria given for maintenance of Cost Record/Cost Audit as per the Companies (Cost Records and

Audit) Rules, 2014. Hence cost audit/Maintenance of cost record was not conducted.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of (Managerial Personnel) Rules, 2014, the Company has appointed M/s. PK Panda & Co., Practicing Company Secretaries, Chennai to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as "Annexure B". The Secretarial Audit

Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee and delegated to Internal Auditor to maintain its objectivity and independence. The Internal Auditor reports to the Chairman of the Audit Committee of the Board and to the Chairman & Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company and promptly informed the management on the lacking as and when required.

FINANCE

The Cash and cash equivalent as at March 31,2017 stands at Rs.128.20 lakhs. The Company continues to focus on judicious management of its working capital, receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

FIXED DEPOSITS

The Company has neither accepted nor renewed any Fixed Deposits from the public during the year under review.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DIRECTORS

Mr. Srinivasan Sethuraman was appointed as Joint Managing Director of the company with effect from 01.04.2017 and his tenure is going to be 3 years from the date of his appointment.

Mr. Keshav Narayanan Kantamneni proposed to be reappointed for a further period of 3 years w.e.f. 11.06.2018

KMP & CHANGES THEREIN KMP DURING THE YEAR

Managing Director Mr. KeshavKantamneni
Whole Time Director Mr. Manohar RamabtarJhunjhunwala
Chief Financial Officer Mr. N.K. Jain
Company Secretary Ms. S. S. Deepthi

CHANGES IN KMP

During the year under review Mr.Raghuram Nath, CFO resigned with w.e.f 04.10.2016 and Mr. N.K. Jain was appointed as Group CFO w.e.f

04.10.2016. Ms. S. S. Deepthi, Company Secretary, resigned w.e.f

24.04.2017.

BOARD EVALUATION

Pursuant to the provisions of The Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and other Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination & Remuneration Policy is stated in Annexure-C.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The company has framed Familiarization Programme for Independent

Directors pursuant to Equity Listing Agreement and uploaded the same in the website of the Company. The web link to access the aforesaid programme is http://www.uniply.in/pdfexcel/INDEPEDENT_ DIRECTORS_FAMILARISATION_PROGRAMME.pdf.

MEETINGS

A calendar of Meetings is prepared and circulated in advance to the Directors. During the year under review ten Board Meetings, four Audit Committee Meetings and other Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gaps between the Meetings were within the period prescribed under The Companies Act, 2013.

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(2) read with rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company - Nil

The Information required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is as per Annexure - D

SUBSIDIARY COMPANIES

During the year under review the Company has acquired Vector Projects (India) Private Limited as the Wholly Owned Subsidiary of the Company w.e.f 1st September 2016. Consolidated Balance Sheet is part of this Annual Report. The detail with respect to Subsidiary slated in Annexure - E

During the year under review Company has also acquired 13,39,198 Equity Shares of UV Boards Limited through Share Purchase Agreement and Open Offer. Subsequently your Company has been reclassified as Promoter of UV Boards Limited with management control.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The policy on Related Party Transactions as approved by the Board

is uploaded on the Company’s website. The Web link for the same is http://www.uniply.in/pdf-excel/RELATED_PARTY_TRANSACTIONS_ POLICY.pdf.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a vigil mechanism/Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The details of the vigil mechanism/Whistle Blower Policy is posted on the website of the Company and available in this web link:http://www.uniply.in/pdf-excel/ WHISTLE_BLOWER_POLICY.pdf

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure F".

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of The Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure G".

ENVIORNMENT & GREEN INITIATIVE

The Company is committed to the environment. The Company continues to upkeep effluent and chemical treatment plant besides green belt inside the factory premises. Continuous check of air and water pollution at manufacturing unit is made and monitored. Your company is certified with FSC (Forest Stewardship Council) besides being an existing member of IGBC.

LISTING ON STOCK EXCHANGES

The Equity shares of the Company are listed on Bombay Stock Exchange Ltd. (BSE) & National Stock exchange of India Limited (NSE) and necessary listing fees have been paid upto date.

FOREIGN EXCHANGE MANAGEMENT

The management has adopted required foreign currency hedging mechanism from time to time to safeguard from exchange loss.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act our company has constituted an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. During the year under review, the ICC has not received or disposed any complaint relating to sexual harassment at work place of any women employee.

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programmes that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

INDUSTRIAL RELATIONS

During the Year under review, Your Company enjoyed cordial relationship with workers and employees at all levels.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexures, together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015.

POSTAL BALLOT

Pursuant to Section 110 of the Companies Act, 2013 read with

Companies (Management and Administration) Rules, 2014 the company had sought approval by way of postal ballot notice dated 16.03.2017 to infuse fund by way of Bonds/Non-Convertible Debentures (NCDs)/other Debt Securities up to Rs. 500.00 Crores on private placement basis.

Further the Company has also sought approval by way of Postal Ballot notice dated 11/08/2017 (a) to ratify / approved related party transaction (b) to sale / dispose off plywood and allied business to Uniply under slump sale and (c) to amend the object clause of the Company.

EXTRAORDINARY GENERAL MEETING HELD ON 26.11.2016

Extraordinary General Meeting of the Members of M/s. Uniply Industries Limited was held on Saturday the 26th day of November, 2016 at 9.00 am to comply the formalities of preferential allotment, as advised by the Stock Exchanges.

ACKNOWLEDGEMENTS

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain a leading player in the industry. The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, redistribution stockists, retailers, business partners and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Company’s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests. The Directors also take this opportunity to thank all Investors, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges, for their continued support.

For and on behalf of the Board of Directors
Keshav Kantamneni
Place: Chennai Chairman & Managing Director
Date: 14.08.2017 DIN:06378064